Every time a customer pays with a credit card, businesses lose a percentage of their revenue to processing fees. But what if you could pass that cost to the customer instead? That’s where credit card surcharges come in.
What Is a Credit Card Surcharge?
A credit card surcharge is an additional fee that businesses charge customers who pay with a credit card. This fee helps offset the credit card processing fees that merchants typically pay to card networks and payment processors.
How Much Are Credit Card Processing Fees?
On average, businesses pay between 1.5% and 3.5%* per transaction in credit card processing fees. This amount depends on factors like the card type (Visa, Mastercard, Amex), transaction method (swipe, chip, online), and business category.
For example:
- Visa & Mastercard: 1.5% – 3.0%
- American Express: 2.5% – 3.5%
- Online Transactions: Typically higher due to increased fraud risk
For a business processing $50,000 per month in credit card transactions, even a 2.5% fee means losing $1,250 per month ($15,000 per year) in processing costs.
*As of 2025, these rates reflect the most current industry data available. Processing fees may vary based on provider terms, business type, and regulatory changes.
Can Merchants Charge a Credit Card Fee?
Yes! In most U.S. states, merchants can charge a credit card surcharge, but they must follow certain regulations:
- State Laws: Surcharging is legal in most states, but some (like Connecticut and Massachusetts) prohibit it.
- Fee Limits: Businesses can’t charge more than 4% of the transaction amount.
- Disclosure Requirements: Customers must be notified of the surcharge before payment.
Is a Credit Card Surcharge the Same as a Convenience Fee?
No. While both involve extra charges, they have different rules:
- Credit Card Surcharge: Only applies to credit card transactions.
- Convenience Fee: Charged for using a specific payment method (e.g., paying a bill online instead of in person).
How Do Surcharges Work in Credit Card Processing?
Here’s how businesses implement a surcharge credit card processing model:
- Check State & Card Network Rules – Ensure surcharges are allowed in your state and follow Visa/Mastercard policies.
- Register With Card Networks – Some card brands require a 30-day notice before surcharging.
- Update POS & Payment Gateway – Your system must automatically calculate and display the surcharge amount.
- Notify Customers – Clear signage at the point of sale and on receipts is required.
- Set a Fair Surcharge Rate – The fee must not exceed your actual processing costs (capped at 4%).
How to Communicate a Surcharge Payment to Customers
Customers appreciate transparency when businesses explain why a card payment surcharge exists. Best practices include:
- Clear Signage – Display notices at the entrance, checkout, and online payment pages.
- Honest Messaging – Explain that surcharges help offset rising processing costs.
Offer Alternatives – Suggest debit, ACH, or cash payments as fee-free options.
Why Choose VANX Surcharge Payments?
VANX Software Solutions provides a seamless and compliant way to implement surcharge credit card processing ensuring businesses maximize revenue while staying within regulations.
Benefits of VANX Surcharge Payments:
- 100% Compliance – We handle all legal and regulatory requirements for you.
- Seamless Integration – Works with your existing POS, payment gateway, and invoicing software.
- Zero Cost to Business – Customers cover the processing fees, so you keep your full revenue.
- Automatic Fee Calculation – No manual adjustments needed; the system applies the correct surcharge.
- Transparent Customer Experience – Clear, upfront fee disclosure ensures no surprises at checkout.
- Dedicated Support – Our team assists with setup, troubleshooting, and compliance updates.
The Future of Surcharging
With rising processing costs, more businesses are adopting surcharge credit card processing solutions. Studies show that most customers accept surcharges when presented clearly. As digital payments evolve, staying compliant and transparent is key.
Should Your Business Implement a Surcharge?
If credit card processing fees are cutting into your margins, implementing a surcharge payment strategy could be a smart move. Just ensure compliance, communicate with customers, and explore surcharge-friendly payment processors like VANX Surcharge Payments.
